What Do AES Corporation’s Institutional Holdings Suggest?



AES’s institutional holdings

Institutional investors have increased their positions in AES Corporation (AES) in 2Q16, as compared to where they stood as of March 31, 2016. Meanwhile, the percentage of float held in AES Corporation by institutional investors has increased by 8% in the second quarter, as compared to March 31. (The float of a company is the number of shares that are available for trading.)

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What’s this mean?

The long position additions of institutional investors mostly depict market bullishness on a stock. For AES, the number-by-buyers increased by a robust ~8% in 2Q16, while the number of sellers declined by ~5% in the same period over 1Q16. The number of new buyers increased by 22%, and the number of selloffs took a dip by 38%.

The percentage of float held by institutional investors in AES has jumped from 106% at the end of 4Q15 to ~114% as of June 12, 2016. Interestingly, the stock price declined by more than 5.5% in the second quarter despite institutional investors’ new long positions. T. Rowe Price, Blackrock, and Vanguard Group are the top three institutions holding AES Corporation as of June 12, 2016.

AES’s outstanding dividend growth could be an added highlight to attract institutional investors, and increased institutional holdings must have contributed to the stock’s recent rally.

We should note here that overrated utilities (XLU)(IDU) at this point in time can confuse investors about whether to hold or exit. But analyzing what institutional investors are doing can provide useful insight into such situations.

In the next and final part, we’ll discuss analyst recommendations and price targets for AES going forward.


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